New Research: Historic Economic Milestones for Black Americans Mask Persistent Economic Insecurity

August 26, 2024

Contact:Peter Hart, Mail_Outline

Despite record low unemployment and poverty rates, African Americans still face broad economic insecurity amidst ongoing inequality

WASHINGTON - A new brief from the Joint Center for Political and Economic Studies and the Center for Economic and Policy Research (CEPR) documents that as Black Americans experience record-breaking economic gains, a closer examination reveals persistent economic insecurity and enduring inequalities, underscoring the critical importance of economic issues for African Americans.

"The Best Black Economy in Generations - And Why It Isn't Enough" shows that on many leading indicators, there has been positive advancement for Black Americans: Record low unemployment and poverty rates, along with record high income levels and strong growth in household wealth. Black unemployment in 2023 was a record low of 5.5 percent - about half of the average rate in the previous 40 years. Likewise, the prime-age employment rate was at a historic high in the first half of this year (78 percent), and Black median household income was at its highest point in a generation ($53,000). Median Black household wealth or net worth (assets minus debts) reached a new high in 2022 of nearly $45,000 - a substantial improvement from the low of about $17,000 in 2013.

Yet despite the fact that these economic indicators are the strongest the African American community has seen, it is also true that $45,000 of median wealth keeps most African Americans substantially distant from the $190,000 estimated to be at the lower limit of middle class wealth. Similarly, the new high of $53,000 of median household income for African Americans is far below the $75,000 median household income for Americans as a whole. Black Americans historically have had such weak economic numbers that their recent heights still do not have most African Americans near economic prosperity or even security.

Adding to the economic insecurity faced by African Americans is the persistent issue of racial economic inequality. At the current rate, it would take over 500 years to bridge Black/white income inequality, and nearly 800 years to bridge Black/white wealth inequality. While Black wealth has increased, it has far to go before getting beyond asset poverty and even approaching the white median wealth level of $285,000. On average, white households still have more than six times the wealth of Black households.

"The stark reality is that despite recent economic gains, the pace of progress in closing the racial wealth divide remains alarmingly slow," said Dedrick Asante-Muhammad, president of the Joint Center for Political and Economic Studies and co-author of the brief. "Without significant and targeted policy interventions, it could take centuries to achieve true economic equality between Black and white Americans - an unacceptable timeline that demands urgent action."

As the brief notes, this paradox may be seen in the views that African Americans express about the state of the economy. While there is optimism about personal financial futures, polls show that Black people remain concerned about the national economy. In a 2023 Pew Research poll, only 27 percent of Black Americans viewed economic conditions as excellent or good. Yet at the same time, 67 percent of African Americans expressed optimism - feeling good to somewhat good - about their financial future according to a Joint Center for Political and Economic Studies' poll. In the aforementioned poll, African Americans were also clear concerning their primary economic challenges: High inflation, high interest rates, and a lack of funds to invest were their top economic challenges.

"While there has been undeniable progress in the Black economy over the last decade, it's deeply concerning that these advancements aren't met with the urgency and action needed to address the root causes of African American economic insecurity," said Algernon Austin, director for Race and Economic Justice at CEPR and co-author of the brief. "Racial inequality, at its core, is driven by economic disparities, and unless we center these issues in our national discourse and policy-making, we risk perpetuating a divide that could take centuries to close. It's time for leaders to engage with the critical analyses provided by Black scholars to make meaningful strides toward true economic equity."

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